Abstract: Controlling investment can improve the operating efficiency of the internal capital, while it may also increase the agency problems. Using the data of A-share listed companies in Shanghai and Shenzhen stock exchanges from 2007 to 2019, this paper applies the dynamic DID model to examine the impact of the transfer of the state-owned control on the controlling investment and its influencing mechanism. The results show that the transfer of the control of state-owned enterprises has promoted the controlling investment, and that the control transfer of state-owned enterprises can increase the controlling investment mainly through the tunnelling effect of the controlling shareholders. The multiple large shareholders have a negative governance effect on the controlling investment promotion effect of state-owned control rights transfer. Further analysis shows that the companies with state-owned control transfer can achieve industry changes and scale expansion through the controlling investment, but they tend to controlling investment with higher premium and lower expansion efficiency. In addition, the control transfer of state-owned enterprises has an obvious time effect on the controlling investment. From the perspective of the tunnelling effect of the controlling shareholders and the governance effect of the multiple large shareholders, the above-mentioned conclusion reveals that the transfer of the state-owned control is an important factor affecting the corporate controlling investment, which not only provide empirical evidences for the investors and other stakeholders to screen the corporate controlling investment behaviors, but also provide policy references for the stock right design in the mixed ownership reform of state-owned enterprises.

Key words: control transfer of state-owned enterprises, controlling investment, multiple large shareholders, tunnelling